13 April 2017
Newsletter

Ukraine Ratified the Double Tax Treaty with Malta

Today, on 13 April 2017 the Ukrainian Parliament ratified the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income with Malta (the "Treaty") and the Protocol to it.

It is expected that the withholding tax limitations to be applicable to the passive types of income in the state of source will be as follows:

  1. Dividends – 15% general rate; 5% reduced rate applying if the dividend recipient is a company (other than a partnership) holding directly at least 20% of the capital in the company distributing the dividends;
  2. Interest – 10% general rate; full exemption is applicable to interest paid on loans granted by the government, central bank or state-owned bank as well as on the state-guaranteed loans;
  3. Royalties – 10% rate that applies to royalties payable for the rights to use any copyright of literary, artistic or scientific work, any patent, trademark, design or model, plan, secret formula or process, or for know-how
  4. Property-rich company – gains from the sale of companies, which shares derive at least 50% of their value from immovable property, are taxable in the state where such property is located.

Also, the Treaty is expected to set up between Ukraine and Malta the recent version of OECD provisions on the information exchange.

The law ratifying the Treaty is pending signature of the President of Ukraine now. The Treaty will come into force once the parties complete their internal ratification procedures and exchange the instruments of ratification, while its provisions will apply to income derived the next year after such exchange.


For further information please contact Asters' partner Constantin Solyar
and associate Pavlo Shovak.

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